Wednesday, November 09, 2011

Boyd Gaming establishing first-hand knowledge of and developing customer base in Hawaii, could prove valuable to Waikiki Gambling Hall Operator


Paul Chakmak, EVP  & COO
Boyd Gaming Company 
Paul Chakmak [Executive Vice President & Chief Operating Officer]

...Moving to Downtown Las Vegas, we saw continued strength as EBITDA rose nearly 6% on higher revenues. It's important to note that this EBITDA growth came despite an $850,000 year-over-year increase in fuel costs at our Hawaiian charter service, a trend that we expect to continue in the fourth quarter.

At the property operating level, EBITDA rose about 11% as all 3 properties recorded year-over-year growth. This performance is being driven by growing strength in our Hawaiian customer segment; visitation and play among geographic Hawaiians was up significantly during the third quarter. There are several factors playing in our favor in Hawaii. First and foremost, Hawaii's economy has been strong, providing our customers greater confidence and more discretionary income. And second, we continue to be successfully in marketing to our Hawaiian customers, which help drive growth in this market segment. Importantly, we are better positioned to take advantage of growing demand from Hawaii after putting a Boeing 767 into service on our Hawaiian charter route earlier this month. This aircraft gives us 12% increase in available seats, allowing us to fly in more than 6,000 additional customers per year based on our current 5-flight-per-week rotation while improving the customer experience...

Capitol Consultants of Hawaii

Boyd Gaming Company
George A. “Red” Morris, president and lead lobbyist at Capitol Consultants of Hawaii was registered as Hawaii lobbyist for Boyd Gaming in 2005, 2006, 2007 and 2008. Morris experienced a hiatus from Boyd Gaming during 2009 and for most of 2010 but reported in November 2010 and through 2011 that he was once again a lobbyist for Boyd Gaming.

Detroit Casino Syndicators (MotorCity Casino)
Lobbyist John Radcliffe, Morris’colleague at Capitol Consultants, has been registered as a lobbyist for Detroit casino syndicators during periods that parallel Morris’ attachment to Boyd Gaming with one exception, Radcliffe was re-registered to lobby for the Detroiters for the better part of 2010.

Since about 2000, the Detroiters have made numerous attempts to legalize gambling in Hawaii and obtain approvals to establish and operate a Waikiki casino.  Now they also count as an associate former Hawaii Gov. John D. Waihee III, an attorney, lobbyist and Hawaiian Homelands champion.

Conflicts of Interest? Or Partners?
The Detroiters' schemes in Hawaii have mirrored those that got voters to approve (1996) gambling in Detroit  and secured the rights to develop and operate a Las Vegas-style commercial casino in the Motor City.  In those efforts, Las Vegas-based Circus Circus (Mirage Resorts) had been a silent, even secret partner and then originally the managing partner of MotorCity Casino.

It could be presumed Morris and Radcliffe are representing substantial competing gambling interests under the same roof and in an environment that risks creating potential conflicts; however, understanding the Detroiters' history, one could assume that the Detroiters and Boyd Gaming are operating in the spirit of partners or with an understanding of likely partners eliminating any concerns about or the potential for conflicts.  Boyd is certainly gaining valuable experience in and understanding of  the Hawaii market and developing a relationship with Hawaii-based customers/guests.

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